Marketing Principles – Shaping Your Future







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Marketing Principles – Shaping Your Future

Task 1 (L.O. 1: 1.1, 1.2, and M1, D1)

Introduction of Greggs Plc

Greggs was started as a small shop and bakery in 1951. It has since grown, with 1,650 shops, and nine regional bakeries. The bakery currently has 19,500 people in its employ who serve in different domains such as retails, administration, management and the bakery itself. Greggs operate on a certain success “recipe”, which is based on four factors that are considered vital (Greggs Plc, 2015). For the future the company plans on expanding on the same principle to enhance their success further as 2014 saw exceptional growth of Greggs. The factors include great tasting fresh food (“Always fresh. Always tasty”) with good value for money, a great shopping experience, with focus on providing the best food-on –the-go throughout the day, the next factor is simple and efficient operations that is focused on the existing internal operations, finally, improvement through change as Greggs believes that investment into their systems and process will contribute to the necessary competitive edge on the market. Although Greggs is a national company, they relish in providing the regional favourites and delicacies, Greggs style (Greggs Plc, 2015).

Marketing Process

Various Elements of the Marketing Process

Several vital determinants for creation and actualization of aggressive promoting systems methodologies include a comprehension of their rivals' targets, shortcomings, and qualities. These has positioned the organization explicitly against the contenders and given it the best conceivable upper hand (Baverstam Associates Inc., 2015). Marketing is considered to be a standard guide of making choices, with a set of blend that can meet the buyer desires of the most profitable conceivable. Strategic marketing leads to competitive analysis by use of tools, such as SWOT or PESTLE (Downey, 2007; ABAHE, 2005). The mission of promotion aims at assembling of client base and ensures long-haul maintenance reliability by regular questioning. Hence, transient activities are expected to reinforce its fulfilment. Another interpretation is presented by the relationship marketing. This deals with translational promotion. It is a practice of drawing in, keeping up, and upgrading one’s association with his or her client and partner. This constantly fortifies the system for the common advantages of both the sides, through innovative, individualized, and esteems integrated, with contact over a more extended timeframe (Woo & Leelapanyalert, 2014; Ehrlic & Fanelli, 2012)

According to the studies done by Akinyele (2011), Jaakkola et al. (2010), Moorman and Lehmann (2004) and Morgan and Rego (2009) state that the contending firms in a given business sector are prone to change as far as their size, assets, and goals are considered. Further, Veskaisri, Chan and Pollard (2007) and Siegfried 2014) emphasized on the positive link between the success in business and planning, as well as the negative link between the lack of planning and firm’s performance (Efendioglu & Karabulut, 2010). Hence, there is an emergence of market planning process.

This report discusses on the requisite marketing steps needed to be followed by an organization to develop an efficient marketing plan. The marketing process involves situation extensive analysis, both internal and external, which is analysed by the use of tools, such as SWOT, PESTLE, and Porter’s five forces. The internal analysis is based upon the situation analysis. In this case, the market needs to be segmented, targeted, and positioned. Further, there is a need to identify the need and wants of a customer, and also analyse the competitors and products that exists in the market. The third phase involves 7Ps of marketing that includes product, price, place, promotion, physical evidence, and process. The product launch is followed by the analysis of the customer’s satisfaction. There is also a need to look at the feasibility of international marketing. The final step includes implementation and evaluation through relationship marketing.

Assess the profits and costs of a marketing orientation for a selected group

In the current global competitive environment, the customers have high expectations, as they are encompassed with more options to choose from, and are therefore, prone to switch loyalties as per their convenience. The businesses that appear invincible with regards to market domination often reorganize their businesses to amend as per the changes observed in customer requirements. It is quite possible that business houses that dominate the market in the present time, are believed to sustain their domination even in the near future (Bloom & Kotler, 1975).

For Greggs to maintain and sustain its competitive advantage in the market, its retention of its clients is of vital importance (Rose, Abdullah & Uli, 2010). Relationship marketing has emerged as one of the most important strategies for retaining customers. Success can be seen in long term retention of its customers if it applied the strategy of relationship marketing to the structural and social aspects rather than the financial (Palmatier, 2008). Establishing good relations with the customer not helps to sustain the business but also increases sales, profit and its eventual objective is high financial performance in the long run (Kanagal, 2009). Relationship marketing strategies however require much time, effort and financial resource to ensure the success of the same. But at the same time, understanding that relationship marketing adds the most value to competitive advantage through various evidences is a fueling factor (Hunt, Arnett & Madhavaram, 2006). Hence, Greggs must invest in relationship marketing to retain its competitive advantage and focus on the retention of customers.

Task 2 (L.O.2: 2.1, 2.2, 2.3, 2.4, 2.5 and M2, D2)

Macro and Micro Ecological Factors Which Influence Marketing Decisions:
2.1.1 Marketing Audit

Marketing audit gives an overview of Gregg’s present situation in marketing activities. This method was accepted evaluation method and controlling mechanism of marketing performance of Gregg. The chief principle in marketing audits include firstly choose the marketplace and evaluate the strength, weakness, opportunities and threat. After that auditor attempts to identify the firm’s strategies, policy adoption and systems. Marketing audit covers six areas include marketing environment audit, system, organisation, function, strategy and productivity (Vana & Cerna, 2012).

2.1.1.2 SWOT analysis (Micro Ecological factors)
Marketing Mix (4P’s) and Marketing orientation

Marketing mix is a common term used to implement the firm’s products in marketing. They are four 4P’s of marketing mix. This was briefly discussed in below section.

Product

In the 4P’s of marketing, product played a major role. Product is either an intangible or tangible service which seems to meet a particular customer demand or need. Gregg has unique products with improved coffee blend, sandwich range, ‘balanced choice’ of healthy eating, and popular meal deals.

Place

Place is the essential one for any firms. While, placement strategy supports to assess what channel is the most suited to a product. Almost 85 percent of the shop locations are away from the high street with extended trading hours. Gregg has planned to open 80-100 new shops through franchise partnership.

Price

Gregg’s constantly higher the experience of customers and businesses in terms of proper price. Price covers the actual amount of customer that is expected to pay for a product. In these aspect, Gregg’s prepared different varieties of fresh menu in day by day with testier. Based on this, Gregg’s fixed the product price (Price Guide Lady, 2015).

Promotion

Promotional mix is one of the best value added marketing strategy. Greggs had provided more investment to promotional activities by giving a particular range of meal deals (Insider Media, 2011) and also made various promotional activities include TV campaigns and providing pamphlets ( Fitzherbert, 2013; Martin, 2014).

2.1.1.2 Macro Environmental Analysis

PESTLE Analysis

Political: Any change in the government, and their law would likely to affect the firm. Especially increased legislation on food, EU laws, major events would affect the firm. For instance, recent VAT added to Pastries has threatened which forced them to introduce petition (Smithers, 2012).

Environmental: High interest rate and inflation, disposable income, weak consumption expenditure

Socio-cultural: Change in the consumer needs, increase in health and hygiene and social responsibility would likely to affect the firm

Technological: Electronic point of sales, marketing using technologies such as e-commerce sales and advanced catering and cooking equipment’s. Yet, the limited scale of operations of Gregg especially in-store shopping would put a disadvantages over its counterparts.

Legal: Legislations related to health and safety and employment law, consumer rights would likely to affect the firm.

Economical: High unemployment and also increasing manpower costs would negatively affect the firm. In the first quarter of 2014, the UK’s labour costs index increased to 104.90 while in the second quarter it increased to 105.70 points (Office for National Statistics, 2015). Gregg, which has huge employee base, an increase wages would likely to affect the company profit.

Porter’s Five Force Analysis

Competitive Rivalry (moderate): The chances of competitive rivalry remain moderate at national level. Even though Greggs are a leader in the baking market in the UK especially with their food-on-the-go and always fresh and always tasty concepts, their operations delving into multiple industries may help to reduce the competitive rivalry.

Threat of entry: The threat of new entry is high, as presently even supermarkets offer baked goods, sandwiches and the like and also other newer bakeries offering similar services at a lower cost is an imposing threat.

Threats of substitute Products: This too is high, as aforementioned supermarkets nowadays in the UK offer baked goods as a part of their experience. Due to this convenience customer may opt to pick their baked goods from there.

Power of Supplier: The power of the supplier however remains low. As the firm has more of an upper hand in choosing more practical and viable suppliers as per its needs.

Power of Buyer: The power of the buyer is perhaps the highest threat. Purchases from the supermarket, presence of alternative bakeries such as Percy Ingle or Oliver Adams, pose a threat. Furthermore, the changing tastes and needs of the customer must also be taken into consideration along with price sensitivity.

2.3 Targeted Marketing

Targeted Marketing can be achieved through adoption of various marketing strategies which are differentiated marketing, undifferentiated marketing, concentrated marketing and micro marketing (Alon, Jaffe & Vianelli, 2013).

  • Differentiated Marketing

The market segmentation identifies the profitable target segments for which definite marketing mixes are adopted to cater the needs of specific customers. This follows multiple targeting strategies for different segments of consumers. A better product design, brand image, market research, inventory, production, promotion and management costs are incurred additionally to achieve a successful marketing mix. Car manufactures such as General Motors, Honda, Tata and others offer vehicles for all cadres of customers.

  • Undifferentiated Marketing

The entire target customers are addressed through a sole marketing strategy with the assumption that there exist no differences among consumer characteristics. Market segmentation is not done because a single product is targeted upon mass population to achieve economies through bulk production. Commodity products like wheat, sugar and others follow undifferentiated strategy to minimize the marketing costs.

  • Concentrated Marketing

The market segmentation identifies several segments among a large sample, but an organization need not cater the needs of all because the product lines of the company may be unattractive to few customer bases. Hence, a concentrated marketing strategy is adopted to target the needs of only a specific set of customers. A specially designed single marketing mix is developed which consumes higher expenditure in R & D for understanding the customer requirements, in short it can be mentioned as niche marketing. Luxury Watch manufacturers such as Rolex manufactures premium watches for luxury customers and are sold at premium outlets.

  • Micro Marketing

The needs of customers are unique and hence a tailor made approach for meeting the requirements of customers is offered by the organizations. A custom made marketing mixes are developed for various customers. There exists a direct relationship between supplier to customer to fulfil the expectations and also to justify the sales and marketing efforts taken for individual buyers. Real Estate Industry can be considered as the suitable example for Micro marketing because the realtor understands the individual needs and preferences in seeking a property.

Gregg focused on large market segment as it has shops all over the UK with more than XX. Cost leadership strategy would enable the firm to remain in the lowest-cost producer while Gregg do not fall under this category as it produces high quality products using high technology and expensive equipment’s. Therefore, products costs are expected to high. However, it is clear that from Porter’s Generic framework strategy, companies still need to adopt strategies to control their costs especially operations, labour, input and distribution costs. Gregg still works on this as their objective is to increase the profit margin rather than reducing the products prices. Leadership costs strategy has been followed by the firms those focus on unbranded commodities but Gregg does not fall under this category as it offers branded products. Differential strategy is the strategy that the firm focuses on different products that are unique and differentiate from their competitors. In the case of Gregg, it focuses on creating innovative recipes, with high quality and fresh bakery food at valued price, focus on differentiation in terms of brand image, technology use, service quality, customer values, and distribution set up all these have created differentiation which led to creation of brand loyalty and reduced price elasticity. Therefore, Gregg has adopted differentiations strategy to create brand loyalty.

2.4 Buyer Behaviour

To a greater extent, the purchasing conduct is impacted by four main instrumental factors that includes social, individual, and mental. These factors influence the product development stage and brand preferences amongst the customers. Irrespective of this fact, direct controlling of the factors has not been possible by the marketers. Hence, it is essential for the marketers to understand the impact of marketing mix strategies with a view to appeal the buying behaviour of the customers behaviour, and construct their marketing strategies that aims at appealing them (Rani, 2014). Gregg uses their loyalty database to understand the customer behaviour in order to build marketing strategy and to provide improved service (Greggs plc, 2015c).

2.5 Positioning Strategy for selected product or service

Gregg has strong brand position in the food-on-the-go market where it ranks number one in the sweet and savoury snacks, while number two in the sandwiches segment. It has broad customer base (Greggs plc, 2015b).

Task 3 (L.O.3: 3.1, 3.2, 2.3, 3.4, 3.5 and D3)

3.1 Market Mix

The 4Ps are incorporated by the routine components of an advertising blend that includes price, product, promotion, and place. However, the prolonged marketing mix comprises of 7Ps, three more Ps have been included, such as people, process, and physical evidence. The people would relate to the employees of an organization who are instrumental in delivering high quality service to them. The procedure involves product delivery that has impact on the customer perception about the organization. The image of the organization would be outlined by the physical evidence through its physical premises, staff appearances, and other properties. All these factors are instrumental in building the brand image and customer loyalties (The Chartered institute of Marketing, 2009).

The Physical Layout

Almost 213 shops have been refitted with seating facility.

Customer Service

Gregg has introduced digital customer loyalty scheme called ‘Gregg Rewards’. To satisfy the customer, novel and improved coffee blend was launched. Trading hours was extended.

Processes

Gregg has implemented workforce management across the retailers (Sillitoe, 2015) and supplier relationship management (PROACTIS) programs and system platforms to enhance their relationship with the employees and suppliers and to compete effectively in the fast-moving food-on-the-go market. Further, in the year 2014, ERP software was introduced to enhance the process (Greggs plc, 2015c). Further, they have focused on central forecasting and replenishment system and new customer contact system to enhance customer relationship management (Greggs plc, 2014).

3.2 Distribution Channels to provide customer convenience

Gregg has vertically integrated operations and distribution structures as shown in the Figure 1. Further, new franchise partnership also been initiated to expand their distribution across the UK (Greggs plc, 2014). An efficient logistics solution is required to optimize the distribution channels.

3.3 Price Strategy

Price strategy was applied to identify the optimum price of the product. This strategy is mixed form of other strategies include product, place and promotion. Further it covers psychology and discriminatory pricing.

Psychology

A pricing strategy which is specializes in causing psychological effects among end users. This marketing strategy based on using specific pricing methods to form a psychological influence on end users. Based on customer’s intention to buying food, Greggs frequently provide different offers to end-users as in the range of £3 sandwich meal deal and also gives sweet at the price £2 (Greggs plc, 2014).

Discriminatory

Price discriminatory strategy possibly tends to sell the same goods or services at distinct prices (White, 2012) based on customers satisfaction and location of firms. There are three levels of price discriminatory pricing. Firstly, strategy made based on intensity of demand; secondly, seller charges less to buyers who buy a bulk product. Thirdly, seller charges distinct amounts to distinct buyers group (Marketing91, 2015). On par with its competitors such as Subway, McDonalds and others, the pricing of the products are relatively competent by utilizing high quality expensive ingredients, efficient baking methodologies and effective logistics. Moreover, Products are priced with an emphasis on ensuring each product to deliver a healthy value of not accounting more than 400 calories. The increasing market demands to shift in nutrition rich products with low calories has resulted in offering the products priced little higher than competitors. However, Greggs adopted more transparent and adopted first level pricing strategy

3.4 Promotional activity

Gregg has merged food-on-the-go and bakery outlet into single brand. Further Gregg success is ability to respond customer feedback by engaging with social media.

3.5 Additional elements of extended marketing mix

The main aim of market segmentation is to reduce the customer surplus that covers the distinct between what a consumer is willing to pay for the product and what those people have to pay. This segmentation was determined by three perspectives are as follows:

People

Satisfied the customers are essential to all the firms. In these aspect, Greggs attained 10th position in UK as per the report of customer satisfaction index (Hawken, 2014). Further Greggs attained second position in branding among young end-users.

Physical layout

Physical layout of any firm that attract the customers to buy a product. In this scenario, Greggs layout is more luxurious than other competitors shop in UK (Swan, 2012). It covers 104-seater coffee shop with attractive interior design was shown in below figure. Gregg layout provide a better shopping experience to their customers.

Process management

Process management is a business solution approach which was describe in long-term approach in many firms (Palmberg, 2009). Manage the complete process of the firm is a major task in any business process. In this aspect, process management in Gregg enable to compete more effectively in fast moving food-on-the-go-market. Gregg planned different benefits from their investment in systems and various processes of different section. In addition, Gregg made product change management system to enhance the efficiency of category development processes (Greggs plc, 2015c). Further Gregg frequently change their menu pattern and create novel dishes as more fresh and delicious one. Food safety is also ensured by Gregg.

Task 4 (LO4: 4.1, 4.2, 4.3, and M3, D3)

4.1 Plan Marketing Mixes for Two Different Segments in Consumer Markets:

Each and every company focuses on consumers with their capacity and with customer’s intimacy. This strategy of marketing in homogenous group is called as segmentation. The major aim of segmentation is the marketing energy concentration and force on subdividing to attain a competitive advantage within the segment (Goyat, 2011).

Demographic

Gregg focuses on all consumer demographics who wants their food-on-the-go but with particular reference to United Kingdom. There are no specific people focused on demographics.

Psychographic

This strategy is a crucial strategy on target markets. This segmentation is to find out and executed on the basis of needs of consumers. Greggs provide flexibility to their products based on customers (Sarli & Tat, 2011).

4.2 Organization and Consumer Market

Greggs operates on UK and Germany as well, based on the demographic segmentation of both countries, the preferences of products among the customers vary widely. UK product range includes Pasties, Bakes, Pasta, Soups, Salads, Sweet, Bread, Hot and Cold drinks. In the German Product mixes, 65% of products include UK based foods and whereas remaining 35% are served based on German baked products because the customers expect novel products and non-traditional products as well. Greggs operates on the basis of one-stop shop solution to cater the needs of both market segments. The company promotes the product lines with positioning the brand image through ‘on-the-go’ and ‘convenient’ offerings of the product through dining and Takeaway points for ease of customers

4.3 Domestic Marketing Strategy

Gregg can focus on Scotland and the North East are the two regions with loyal usage, positive brand perception and strong awareness. The following are the promotion strategy adopted to capture this market. Television marketing especially multichannel stations needs to be selected to deliver high frequency of exposure to almost 40 sec advertisements need to placed. Especially the ads can be released during high-profile football games. Further radio campaigns especially during breakfast and pre-lunch time can be launched. Outdoor activity can be focused on with store awareness at the lunchtime decision making junctions in the key areas of Scotland.

4.4 International Marketing Strategy

However, to Gregg enter international market, they may use the Hofstede model to identify the fundamental cultural difference with four dimensions such as masculinity, individualism, uncertainty avoidance and power distance. Accordingly, they can modify the marketing strategy to enter market.

Product

The growing integration of global markets and development in competition on a worldwide there is a necessary to make different novel products. Gregg entering the international market would focus on novel menus and dishes to deliver their customer.

Promotion

Gregg had existing promotional strategy to marketing their products. If entering an international market, there is a necessary to promote different advertising campaigns

Pricing

Gregg had adopted better pricing strategy to satisfy the customer needs.

Place

Place selection is an essential part on making their business as success at the right time and suitable place. Distribution in making goods or services of Gregg will select a suitable place which is convenient to customers.

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